The trick to finding the best tenant for your vacant rental property involves casting a wide net. Posting rental ads online, hanging a “For Rent” sign in the window of your vacant unit, hosting an open house and putting the word out to your friends and family are good options for marketing your property.
But what about tapping into your already existing pool of renters? Enter the idea of tenant referrals.
Your tenants are your property ambassadors, and their support can help you reach potential tenants through a direct connection. Offering an incentive to your current tenants can help you promote your vacancies, access a large group of quality tenants, and build a sense of community within your properties.
Tenant referral programs typically involve a landlord or property management company giving a monetary incentive or gift to current tenants who recommend your property to an acquaintance. The recommendation goes beyond just a property showing and should include an approved application, signed lease and a paid security deposit.
Great tenants, who are satisfied with their rental property, will gladly recommend their community or property management company to their personal network. And most tenants will recommend a good applicant; they do not want to be associated with someone who would damage your property or fail to pay rent.
A good tenant referral program can lead to a strong sense of community in your property if your tenants already have established relationships with each other.
It is important to remember that in order to receive good referrals, you need to provide great service to your current tenants. Do you follow-up on maintenance requests in a timely manner? Are you reachable by phone or email if your tenants have any questions or concerns? Do you maintain your property’s curb appeal or offer any amenities?
Even if your rental property does not have all the bells and whistles of a high-end apartment community, providing outstanding service to your tenants can help elevate you to win the recommendation game.
When developing your tenant referral program, consider what incentives your tenants would really care about and try putting yourself in their shoes. What type of motivation would it take to encourage you to recommend your home to a friend? Tenant referral programs have included everything from a new appliance or tv to a discount on rent. Some places even offer a full month of free rent if a referred tenant signs a lease. Do some research on what might work in your community, ask your current residents or look online to see if any of your competitors are offering a tenant referral program.
When implementing your referral program, make sure you have all the conditions clearly lined out to refer to if your tenants have any questions. Establish exactly what or how much a tenant will receive for an approved referral. Outline when a tenant will receive their referral reward.
And have clear guidelines about what an approved referral means:
- Must be approved through your established tenant screening process.
- Must sign a lease.
- Must pay a security deposit.
What do you offer your current residents if they successfully refer a new tenant?